THE SITUATION IN GUATEMALA

Created: 12/10/1965

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,'NTELLfcENCE MEMORANDUM-

THE SjfUATIQN JH GUATEMALA ^

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. DIRECCORATE OFffice if Cutreht Intelligence*

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CENTRAL INTELLIGENCE AGENCY Office of Current Intelligence5

INTELLIGENCE MEMORANDUM

The Situation in Guatemala

The Guatemalan government is facing crisis on several fronts. orsening economic problem, destructive political maneuvering attending thocampaign, and increasing public disorder have left the Peralta regime seriously deprived ofand national confidence. Unless dramaticare taken quickly the regime's ability to withstand the combination of poor finances,and conspiracy Is doubtful.

Businessmen and financiers, already concerned by Guatemala's worsening foreign exchange deficit and

a commodity scandal which has reflected on the Integrity of prominent members of the administration, have begun to doubt the regime's ability to cope with terrorists. The latter three times ln recent weeks have abducted members of prominent Guatemala City families for To0 ln ransom has been paidand in the face of police protests. Inept police investigations have been hampered by the refusal of the families of tho kidnap victims to cooperate ln any investigation or apprehension of the criminals.

possibilityoup attemptis growing. Various reports indicate tbatled by Miguel Angel Ponclano, MLNand former armed forces chief of staff,into high gear (see PonclanosupportorB probably believe that theof insecurity and loss of confidence in theregime giveood chance toinimum of public protest. They

apparently also believe that unless they move soon, Peralta will purge the military of the conspirators and probably banish them from the country. Ponciano's motivation is self-serving, since his chances of an electoral victory are slim.

The Ponclano coup plot appears to be developingoint where neither side will be able to Rumors have already begun that certain ofbackers within the military are to beeralta attempt to remove one of the conspiringcould well be the signal for the overthrow attempt.

Ponclano reportedly has won some troopto the conspiracy. This defection of military units suggestsoup attempt may well lead toamong the military. Armed conflict between the Guatemalan military obviously would benefit no one but Communist subversives.

There is also the possibilityreemptive coup might take place, perhaps led by Ricardo Peralta Mendez, the chief of government's nephew. Plotting from this quarter has been reported recently; the chief is undoubtedly aware of it, and conceivably is involved in it (see If thie group were to take power the government as it now exists would continue but with different personalities. Ricardo Peralta Mendez is known to be an ambitious young officer who desires the taste of power. Once at the helm of government, Ricardo Peralta Mendez could not be expected to give up the position willingly.

There isanger that non-militarythose on thewill at some point be willing to engage in civil dissldence to forward their own objectives. This possibility of violence might be reduced in the unlikely event that the regimeonvincing exhibition of its willingness to permit honest competition, such as inviting OAS observers on election day. The ouster of Peraltaroup which does not endorse the established scheduleeturn

to constitutional government would almost surelypolitical violence.

recent terrorism has raised thecontinued instability to be faced by any type offorseeable for Guatemala over the next few years.

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Not only has violent subversion increased of late, In the face of strong security measures, but kidnapings and extortion have channeled large amounts of money into coffers of the insurgents (Yon Sosa's group and the Communists). Further increased capability on the part of these extremists spells continuing and intensified trouble for anyone at the palace in Guatemala City.

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ANNEX A

THE MIGUEL ANGEL PONCIANO SAMAYOA GROUP

1. Miguel Angel Ponclano Samayoa, presidential candidate of the National Liberation Movement (MLN) and former chief of staff of the armed forces, is reportedly the figurehead of the most serious current plot. may have the support of the following:

a. The MLN, whichegime.

who subscribe tophilosophy of Ponciano and the MLNare disenchanted with the incumbent regime.

Soraoza of Nicaragua, whowith MLN loader Mario Sandoval Alarcon andindicated his willingness to providefor Ponclano.

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ANNEX B

THE RICARDO PERALTA UENDEZ GROUP

Ricardo Peralta Mendez, chief of staff of the executive householdhief advisor of Colonel Enrique Peralta, reportedly intends to peacefullythe Chief of Governmentriumvirate for the purpose of forestalling the election of ancandidate. Ricardo Peralta is known to have used his position of influence vlthin the regime to place men loyal to him ln key positions, and presumably has substantial power. Ricardo Peralta's preemptive coup plan may enjoy the complicity of the actual Chief of Government, since it would ensure the continuancesafe" administration. Peralta reportedly has the support of the following:

a. Carlos Enrique Peralta, nephew of the chief of government and Ricardo'a brother and current Minister of Economy.

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The younger officers, who haveand personal grievances against the old-line military.

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